Van Dyck Law, LLC is a full service Estate Planning & Elder Law practice. They write about comprehensive planning in the areas of wills, trusts, powers of attorney, medical directives, Elder Law and probate & estate administration.

Intestacy

11/06/2018

“Without these important documents, your heirs could overlook financial accounts or miss out on life insurance benefits.”

Who likes to think about death and end-of-life arrangements? Not too many of us, to be sure. However, being prepared for the inevitable is a wise thing to do, and it's a kind thing to do for your family.

US News & World Report’s recent article, “12 Documents to Prepare Now for Your Heirs,” says that when people don't have their paperwork ready, it can be a huge headache for the family. A family can be left with all kinds of paperwork to sort out, while dealing with grief. Even worse, heirs may forfeit life insurance proceeds and tax deductions or overlook accounts they don't know exist. That's why it's critical to have important documents ready for loved ones. Here are the documents you should start preparing right away:

A will. This is a legal document in which you name an executor to carry out your wishes, heirs to receive your assets and a guardian if you have minor children.

A letter of explanation. Your will stipulates how assets are to be divided. However, a letter of explanation can provide the reasons for these decisions. This can be helpful, if the estate is to be divided unevenly between children.

List of financial accounts and beneficiaries. Keep a list of all your finances, such as bank and retirement accounts and brokerage funds. Each may have a designated beneficiary or transfer on death provision, known as a TOD. A person who’s named as a beneficiary or TOD designee automatically will receive ownership of the asset after you die. Make sure you keep these beneficiary designations up-to-date.

Personal inventory. Most wills distribute personal property in vague terms, like designating jewelry to one person and household goods to another. To be certain that nothing significant is overlooked, create an inventory of personal items. This inventory can also list items that may be stored in another location, unbeknownst to your family.

Power of attorney. This form is an important document for your family, if you become incapacitated because of an illness or accident. A power of attorney allows a designated person to make decisions on your behalf. One form is for financial decisions, and another is for health care.

Life insurance policies. Your family can miss significant life insurance benefits, if they don't know you have a policy, or it’s been lost or misplaced. Keep records of your life insurance plans and place it with your financial records.

Real estate records. Add deeds, assessments, mortgage statements and property tax information to the documents you've prepared for your heirs. Collecting the records for them in advance will make their lives easier.

Tax returns. List the name of your CPA or tax preparer, if you have your taxes professionally done. He or she can help your family with filing final tax returns for your estate. If you file your own returns, print a copy for your files and record any login information for online tax preparation services.

Logins for accounts. Create a list of your usernames and passwords for financial accounts, email, and social media and keep it where heirs can access the information.

A digital estate plan. Some states recognize digital estate plans as legally binding. However, even if it isn’t, it can be a great resource for your family. A digital estate plan states what will happen to your digital assets, like your social media accounts, websites, digital photos, intellectual property and other files and documents. Within your plan, you can name a digital executor and list those you've named as legacy contacts on specific platforms, such as Facebook and Twitter.

An ethical will. This letter describes what you'd like remembered as your legacy, such as passing down values. An ethical will can be used to share memories or to impart wisdom.

Your final wishes. If you've made prearrangements for your funeral or cremation, place that information with your will and other end-of-life documents. Your final wishes should also include information about organ donation, pet care and who should be notified of your passing.

It’s a big job to nail down these 12 tasks but getting them completed will be a wonderful final parting gift for your family.

10/29/2018

“You have rights, if you believe an executor or trustee is not acting in the best interests of the beneficiaries.”

It’s not uncommon for a parent to pass away with a will that says her children will divide the estate equally, after all the debts are settled. It’s also not uncommon for one of the children—maybe the eldest—to be named the executor. This works just fine in most situations, where all of the siblings get along. Things are settled, and everyone moves on.

However, sometimes an executor can act with some (or a great deal of) self-interest, especially when it’s one of the siblings. That daughter may feel entitled to more than an equal share, because of the care she’s given the parent or for any number of reasons.

What if the eldest sister gets her siblings to sign away their rights to everything? Perhaps some do, but when one sibling says no, this evil executor gets the will probated anyways. Subsequently, the lone hold-out finds out there was a testamentary trust created because she didn't sign away her rights, and—you guessed it—the eldest sister is the trustee. That’s dirty pool!

When the hold-out beneficiary requested an accounting of the trust, the evil executor/trustee refused. When an executor or trustee tries to keep the deceased parent’s estate and trust a secret, it’s not appropriate or acceptable, and she’s breaching her fiduciary duty.

nj.com’s recent article, “Your rights when family fights over a will,” explains that executors and trustees serve in a fiduciary capacity. It means they have a legal obligation to act for another (the beneficiaries) in a fair, honest, and transparent manner. While executors and trustees have the legal authority to manage the affairs of an estate or trust, she’s accountable to the beneficiaries and must inform them of what she’s doing.

When a person dies, the executor must notify, in writing, all beneficiaries named in the will (and all heirs at law, like those entitled to inherit by intestacy) that a will has been probated. This must be done within a specific number of days of the will being probated. The executor must also provide a copy of the will upon request. After receiving the notice of probate, individuals may contest the will within a specific timeframe.

When the will is reviewed, beneficiaries can see that a testamentary trust was created. Once appointed, an executor must settle and distribute the estate, as quickly and efficiently as possible. Both executors and trustees have a duty to collect and preserve assets, deal impartially with beneficiaries and act at all times with the best interests of the estate and trust in mind to be certain that the estate and trust are distributed, according to the decedent's wishes.

A fiduciary also has a duty to account to the beneficiaries. Therefore, in the event a beneficiary has questions about how an estate or trust is being handled, he can request an accounting and copies of supporting documents. Likewise, a trustee is required to keep beneficiaries reasonably informed about the administration of the trust and information necessary for the beneficiaries to protect their interests. The trustee must promptly respond to the beneficiary's request for information on the administration of a trust. If a fiduciary willfully neglects or refuses to render an accounting or breaches her fiduciary duties, you can ask the court to remove her as the executor or trustee.

Therefore, in our scenario, the evil elder sister must, if requested, provide an accounting. If that accounting shows any improprieties, the elder sister may be personally liable for misconduct, including the legal fees for bringing the action.

If this looks like a real situation you’re having, talk to an attorney experienced in probate litigation.

10/03/2018

“A new survey conducted by LifeWay Research for the Southern Baptist Foundation found more than half of Southern Baptist pastors, overall, do not have a will, trust, living will, electronic will, legacy story or durable power of attorney with health care directives.”

However, executives at LifeWay Research say the survey shows a lack of awareness about estate planning and the laws which may be factors in pastors not having a plan in place. Procrastinating is common, but failing to have an estate plan in place can have a devastating impact on an estate.

Of course, basic estate planning saves a lot of trouble for family and loved ones. However, in addition, taxes can be minimized and assets protected.

According to the survey, pastors age 18-44 are the least likely to have a will (31%) or a durable power of attorney with health care directives (14%). Only about half of those pastors closest to retirement (age 55-64 and 65-plus) have a will (54% for both groups). Likewise, few of those closest to retirement (age 55-64 and 65-plus) have a health care durable power of attorney (25% for both groups).

It’s a bit of a surprise that so many pastors don’t have a plan for their families and property after their death, especially those that should be most likely to be thinking about this issue—the ones with young families. They seem to be the least prepared.

About 64% of the clergy surveyed, agree with a statement that the court decides who will care for a child, if the last parent dies without a will; 16% percent disagree, with 21% saying they didn’t know. When asked about assets, the survey showed that 48% of pastors said that if someone dies without a will, their family decides what happens with the assets of the deceased; 33% disagree, and 19% "don't know."

However, both with property and children, the court decides what happens to them, if there’s no will.

These estate planning questions were part of a mail and online survey of pastors conducted between April and June 2018. The mailing list was randomly drawn from a list of all Southern Baptist churches and included more than 1,100 completed surveys.

A document that was said to have been filed with the Oakland County Probate Court in Michigan and signed by her son Kecalf and her estate attorney David Bennett noted the absence of a will.

"The decedent died intestate and after exercising reasonable diligence, I am unaware of any unrevoked testamentary instrument relating to property located in this state as defined" under the law, the document said, according to the Detroit Free Press.

Because she died intestate or without a will, Franklin's finances will become public. Her niece, Sabrina Owens, has asked Judge Jennifer Callaghan to be the personal representative of the estate.

Don Wilson, Aretha's entertainment lawyer, commented to the Detroit Free Press that he repeatedly suggested that she create a trust. "I was after her for a number of years to do a trust," he said. "It would have expedited things and kept them out of probate and kept things private."

The attorney said he would have helped Aretha manage her holdings in music publishing and copyright issues for estate planning. Wilson added that at this point, it's impossible to estimate the value on her song catalog. However, he also said that she retained ownership of her original compositions.

In her home state of Michigan, the assets of a deceased person who was unmarried are divided equally among children. However, creditors or extended family members could contest the estate.

Franklin died at home in Detroit in mid-August.

Her fans gathered to view her body in Detroit at the Charles H. Wright Museum of African American History last week.

An executor is the individual who is appointed under a will, to administer the estate of a person who has died. Unless there is a valid objection, the judge will appoint the person named in the will to be the executor. He or she must insure that the decedent’s desires written in the will are carried out. Some of the practical responsibilities are things like collecting and protecting the assets of the estate, obtaining contact information on all beneficiaries named in the will and any other potential heirs, collecting and arranging for payment of debts of the estate, approving or disapproving creditor's claims, making sure estate taxes are calculated, forms are filed and tax payments are made.

The executor is required to gather the assets of the estate and pay the deceased person's debts, before assets are distributed to the beneficiaries of the estate. This includes credit card debt. This can be made much easier by hiring an attorney for the estate (which the executor can select).

As an example, under New Jersey law, if the assets aren’t enough to pay all of the claims against the estate, payment must be made in the following order:

Reasonable funeral expenses.

Estate administration expenses, including attorney's fees.

Reasonable services rendered to the deceased person by the state office of the public guardian for elderly adults.

Debts and taxes with preference under federal or state law.

Reasonable medical and hospital expenses of the deceased person's last illness, including compensation for those attending that person.

Judgments entered against the deceased person.

All other claims.

In some states, like New Jersey, creditors must present their claims to the executor in writing and under oath, within nine months of the decedent’s death. Other states have a shorter timeframe in which claims must be made. If a claim isn’t presented within that time, the executor won’t be liable to the creditor for any assets which may have been paid to other claimants or distributed to beneficiaries. The executor has three months from the time he or she is presented with a claim, to dispute it by giving written notice. The creditor will then have three months after receiving notice of the dispute, to file a lawsuit against the executor.

07/02/2018

“A successful estate plan also includes provisions allowing your family members to access or control your assets, should you become unable to do so yourself.”

Many people think that having an estate plan just means drafting a will or a trust. Not true! There’s much more to add to your estate planning to be sure that all of your assets are transferred efficiently to your heirs, when you pass away.

Investopedia’s recent article, “6 Estate Planning Must-Haves,” provides a list of items that every estate plan should have. This includes a will (and perhaps a trust), a durable power of attorney, up-to-date beneficiary designations, a letter of intent, a healthcare power of attorney and guardianship designations.

Let's take a look at each item on the list to see if you’ve left any decisions to chance.

Wills and Trusts. This should be one of the main elements of every estate plan—even if you don't have substantial assets. Wills are documents that make certain property is distributed, according to your wishes (if drafted pursuant to state laws). Some trusts also help limit estate taxes or legal issues. But this isn’t enough. The wording of these documents is extremely critical: a will or trust should be written in a way that’s consistent with the way you've bequeathed the assets that pass outside of the will.

Durable Power Of Attorney. A durable POA authorizes an agent of your own choosing to act on your behalf, when you’re unable to do so for yourself. Without a power of attorney, a judge may have to decide what happens to your assets, if you’re found to be mentally incompetent. That ruling may not be what you wanted. A POA can give your agent the power to transact real estate, enter into financial transactions and make other legal decisions in your stead (as if he or she were you). This POA is revocable by the principal at a time of his or her choosing, typically at a time when the principal is deemed to be physically able, mentally competent or upon death.

Beneficiary Designations. Some assets can pass directly to your heirs, without being dictated in the will (like a 401(k) plan). Therefore, it’s important to have an up-to-date beneficiary, as well as a contingent beneficiary, on these types of accounts. If you fail to designate a beneficiary, or if the beneficiary has passed away or is unable to serve, a judge may decide what to do with your funds. This again may not be what you wanted.

Letter of Intent. This is a document, left to your executor or a beneficiary, that defines what you want done with a particular asset, after your death or incapacitation. It can also provide funeral details or other special requests. It’s not a legal document, but it helps inform a probate judge of your intentions and may help in the distribution of your assets, if the will is deemed invalid.

Healthcare Power of Attorney. This appoints another individual (usually a spouse or family member) to make important healthcare decisions on your behalf, in the event of incapacity. If you’re thinking about creating such a document, you should select someone you trust, who shares your views and who would likely recommend a course of action with which you’d agree. A backup agent should also be named, if your initial pick is unavailable or unable to act at the time needed.

Guardianship Designations. If you have minor children or are considering having kids, choosing a guardian is very important and many times is overlooked. Be sure the individual or couple you choose shares your views, is financially sound and is willing to rear your children. You should also add a contingent guardian. Without these designations, a judge could rule that your kids should live with a family member you wouldn't have wanted, and in some cases, the court could require that your children become wards of the state.